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Are employer contributions to a group health insurance plan or retirement plan eligible payroll costs?

For employees

  • Health care and retirement benefits paid or incurred during the covered period are eligible for forgiveness as payroll costs. Expenses paid by employees for such benefits are not eligible for forgiveness. Expenses for future periods that are accelerated into the covered period are also not eligible for forgiveness.

    For self-employed individuals and general partners

  • Employer health insurance contributions and employer retirement contributions made on behalf of self-employed individuals or general partners are not eligible expenses.

    For owner-employees of S-corps

  • Employer health insurance contributions are not included for owners (and their family members) having at least a 2% stake of an S-corp. Employer retirement contributions made on behalf of an owner-employee of an S-corp are eligible and do not count toward the cash compensation cap of $20,833 per individual, and are capped at the amount of 2.5x their monthly employer retirement contribution in the year that was used to calculate the loan amount (2019 or 2020).

    For owner-employees of C-corps

  • Employer health insurance contributions and retirement contributions are eligible expenses. Retirement costs are capped at 2.5 x monthly employer retirement contribution in the year that was used to calculate the loan amount (2019 or 2020). These payments do not count toward the $20,833 cap per individual.

    MoFi Tip: Using 100% of the PPP proceeds toward gross wages is the most straightforward way to achieve forgiveness from the Small Business Administration.